President Trump issued an Executive Order on the evening of July 31st, which sets in motion the imposition of reciprocal tariffs on most countries that have not reached trade deals with the US. The White House will maintain a 10% tariff on most countries that purchase more US exports than they sell to the US; however, it is raising tariffs from 10% to between 15% and 41% for countries that maintain a trade surplus with the US. A notable exception to this policy is Nicaragua, which will continue to face only a 10% tariff despite its trade surplus.

The Executive Order said that the tariffs become effective for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 AM EDT seven (7) days after the date of this order (July 31st), except for goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 AM EDT seven (7) days after the date of this order (July 31st) and entered for consumption, or withdrawn from warehouse for consumption, before 12:01 AM EDT on October 5th, 2025.

Canadian goods increase from 25% to 35%:

President Trump signed an Executive Order, according to this Fact Sheet, to increase the tariff on Canada products from 25% to 35%, with the higher tariff set to go into effect at 12:01 AM EDT on August 1st.

“Canada has failed to cooperate in curbing the ongoing flood of fentanyl and other illicit drugs, and it has retaliated against the United States for the President’s actions to address this unusual and extraordinary threat to the United States,” the Executive Order said. “In response to Canada’s continued inaction and retaliation, President Trump has found it necessary to increase the tariff on Canada from 25% to 35% to effectively address the existing emergency.”

Goods qualifying for preferential tariff treatment under the US-Mexico-Canada Agreement (USMCA) continue to remain not subject to the IEEPA Canada tariffs. Goods transshipped to evade the 35% tariff will be subject, instead, to a transshipment tariff of 40%.

Mexican goods extended for 90 days:

Goods from Mexico that are not covered by Section 232 tariffs will remain exempt from additional duties if they meet USMCA rules of origin. Auto parts will also continue to be excluded, according to an announcement by President Trump roughly 12 hours before the deadline. For products not included under Section 232 and not qualifying for the free trade agreement benefits, Trump stated the tariff rate would increase from 25% to 30%.

Trump stated that Mexico had agreed to, “immediately eliminate its numerous non-tariff trade barriers.” He added, “Over the next 90 days, we will be in discussions with Mexico with the aim of reaching a trade agreement within that timeframe—or possibly beyond it.”

Summary of the Policy

Countries with a trade surplus (they export more to the US than they import from it):

• Tariffs are increasing from 10% to 15%–41%
• Canadian goods increase from 25% to 35%
• Mexican goods extended for 90 days

Countries with a trade deficit (they buy more from the US than they sell to it):

• Tariffs will remain at 10%
  • Nicaragua Exception: Despite having a trade surplus with the US, its tariff remains at 10%.

Implications

Punitive Approach:

• The tariff increases target countries that the US sees as contributing to its trade deficit, aiming to reduce that imbalance.

Incentives:

• Countries that import more from the US are rewarded with lower tariffs.

Geopolitical Messaging:

• The exception for Nicaragua may suggest political considerations (e.g., foreign policy leverage, strategic alignment, or humanitarian motives).

RIM logistics, ltd. will continue to closely monitor this evolving situation and provide updates as necessary. Please reach out to your RIM representative if you have any further questions.